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Blog of the Credit Management and cash collection

Tutorial and online tool for calculating the Z score
The Z-score is very used by credit analysts. What are its strengths and limitations? Online Calculator
New tutorial on Edward Altman Z score, American inventor in 1968 of the business scoring tool which establish a probability of default within two years. The Z score is still widely used after many successive tests and improvements. It is very popular especially by Anglo-Saxon companies who...
03-17-2015
New tutorial on ageing balance
How to create and use an ageing balance? How can it help you in managing your trade receivable? Tutorial and Excel tool to download.
Tutorial on the ageing balance The ageing balance is an indispensable tool for organizing debt collection According to its presentation, it gives several views of customer balances (not due yet, overdue for more than 120 days... etc.) and it helps to prioritize dunning actions. It...
02-25-2015
New tool : the credit risk profile sheet
This tool helps to make a synthesis of a credit case and to consolidate all information needed (commercial, financial, political and economical context...etc.) into a single document.
This new tool is a simple sheet including all the data required to perform a strong credit analysis and to be able to share easily this credit case with all people involved in the credit risk validation process. It is divided into several parts: Customer data. Macroeconomic context...
02-18-2015
Zoom on the cash and risks curves
Focus on this Excel tool to assess the exposure curves on a project and the impact on cash flow month by month
The tool cash and risks curves simulates dynamically the credit risk and manufacturing risk based on monthly costs and payment term applied to invoices. It gives on a monthly basis the actual risks incurred by the seller (loss amount in the event of default by the buyer) and the level of...
02-16-2015
What role for the CFO in credit management?
If the management of credit and collection is done by the credit manager and his team, what is the role of the CFO in the management of this strategic asset?
Revenue growth, optimization of the working capital requirement (WCR) and cash, increase of the profitability and of earnings are all issues related to the management of the accounts receivable orchestrated by the credit manager. The accounts receivable are also the first or second position in...
02-05-2015
What payment methods for export business?
Watch out for traps! The documentary credit commonly called letter of credit is not one and the letter of credit differs drastically from the standby letter of credit. Clarifications needed.
International trade is very specific and differs significantly from domestic trade. Realities are multiple depending on the sector of activity, the country of the buyer and the type of business case. If the means of payment and security tools used are not very numerous, confusion can cause...
02-04-2015
Use online tools of credit management tools!
You need to calculate your DSO and to manage it month by month, to calculate late payment penalties or to assess creditworthiness of your clients...etc? Visit the online tools of Credit management tools.
DSO calculation and DSO reporting : calculate the DSO of your business or for a group of clients or per client. The tool split the DSO into 2 parts: the contractual DSO and the overdue DSO. It also calculates another key performance indicator : the % of overdue.     Late...
01-29-2015
How to use the chart of authority in credit management?
The chart of authority is a key tool of credit management. It defines who is responsible of what and what is the level of approbation of each person involved in the credit management process.
The Chart of Authority (CoA) belongs to the credit management policy and establish the level of authority of each person in the organization for setting up credit limits or payment conditions. The CoA has to be validated by the top management and must be consistent with the credit management...
01-20-2015
Which vows for companies?
What are good questions to ask yourself about your company at the beginning of the year?
Translation of the satiric pic of Charb: Growth arrives! What the hell is she doing? Beginning of the year 2015 is the opportunity to ask some questions. What are the vows to wish to a business? A revenue growth, or at least equivalent to the previous year? A profitability in double...
01-12-2015
New tool: specific dunning letter before yearly closing
Get payment of due invoices before year-end in order to improve cash and balance sheet of your company.
New dunning letter template to be used few weeks before closing of financial year of your company.It requests the payment of all due invoices of this year in order to clear customer account and avoid question of the auditors about reasons of overdue invoices.Look at the tool here.
12-11-2014

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